The National Association of Broadcasters (NAB) Show

World Screen Weekly, April 17, 2008

The annual National Association of Broadcasters convention taking place this week is the last such show to occur during the age of analogue television in the United States. On February 17, 2009, every one of the nation’s broadcast stations is required by the Federal Communications Commission (FCC) to shut off its analogue transmitter and switch to digital signals.

The mandate has caused a flurry of activity across many fronts. On the professional hardware side, TV stations are stretching their budgets to buy everything from new transmission gear to digital switchers, routers and cameras. On the consumer side, while most households that receive service via cable or satellite won’t be affected, the 30 million or so homes that still get over-the-air television will find that their older TV sets will no longer work—literally overnight.

For those households, the government has subsidized a program whereby people who need them will receive one or more coupons worth $40 each that they can apply toward the purchase of converter boxes at retail outlets. The boxes will allow older sets to continue to display pictures and sound.

Because digital transmission is more efficient than its analogue predecessor, broadcasters will be able to squeeze more services into their bandwidth. In addition to transmitting at least one HDTV signal in their local markets—which most will position as their main channel—TV stations will engage in what they call multicasting: broadcasting secondary channels carrying everything from a local weather service to syndicated programming. Content providers are emerging to serve this nascent market.

But the possibility that has generated the greatest excitement among broadcasters is mobile video. With a digital signal, they can use part of the bandwidth available to them to send content directly to mobile phones, PDAs, laptop computers and other handheld devices.

A new trade group, the Open Mobile Video Coalition (OMVC), was formed at NAB 2007 to help create a technical standard for such transmissions and to accelerate the development of mobile TV. OMVC’s membership now includes more than 800 television stations, and that number is growing.

The organization is testing three competing technologies for sending video directly from station transmitters to handheld devices. On May 15, OMVC will submit the results of those tests along with a recommendation for a standard to the Advanced Television Systems Committee (ATSC).

At NAB, OMVC packed a hotel ballroom at 7:30 a.m. with nearly 500 broadcasters eager to learn more about local mobile TV and how it can benefit them. “We’re on track to have the technology ready for the February transition,” Brandon Burgess, the chairman of OMVC and chairman and CEO of ION Media Networks, told the crowd.

That breakfast meeting included a panel discussion led by NBC News legal correspondent Dan Abrams. The participants were Burgess; John Eck, the president of NBC TV Network and Media Works at NBC Universal; Lynn Beall, the executive VP of Gannett Broadcasting; and Alan Frank, NAB Television Board’s chairman and the president of Post-Newsweek Stations.

NBC’s Eck said that local mobile broadcasts would be different from national mobile services such as those now offered by Qualcomm’s MediaFLO and Verizon’s V Cast. While consumers are becoming accustomed to getting video on their cell phones, he said, “they’re not used to getting it live,” and they’re not used to receiving local services like news, weather and community events.

Plus, they’re not used to getting it free, which would be the case if the ad-supported model now being discussed is widely adopted.

The prospect of such services in hundreds of markets, large and small, could be a financial shot in the arm for local broadcasters, whose business is increasingly challenged by other forms of content consumption such as the Internet, games and national mobile video services.

A local mobile service that they would control and distribute through their digital TV transmitters is precisely the kind of consumer experience broadcasters can monetize, said Jim Conshafter, the senior VP of Media General Broadcast Group. At the OMVC breakfast he presented findings of a report from BIA Financial Network and NAB. The study estimates that mobile digital broadcasts to handheld devices could be a $2 billion-a-year business by 2012, with all of that revenue coming from advertising alone. Subscription services could generate additional money. Compared to national mobile video providers, local broadcasters have a secret weapon, Conshafter said. The keys to success are local content and existing relationships with local advertisers.

In addition, TV stations can provide mobile service at a far lower cost than national aggregators because they will be using existing digital infrastructure in which they’ve already invested. “In this room you have under one roof the people who have already built the infrastructure for mobile television,” said Burgess. “It’s easier for us to go to market compared to some of the other efforts being made out there. We have the spectrum, and we have the content.”

Of course, mobile phone manufacturers will need to equip devices with the chips necessary to receive content from local broadcasters, but Burgess said that won’t be a problem because the new services will drive additional handset sales.

“The bottom line is that mobile DTV is real and working,” said Sterling Davis, the VP of engineering at Cox Communications. “There’s no reason why we can’t be up and running by February.”

—By Peter Caranicas